For which of the following is demand likely to be most sensitive to price increases?
A)prescription drugs
B)college tuition for last-semester seniors
C)electricity
D)hospital care
E)a specific brand of soft drink

Question

Quizplus · Accepted Answer

In general, demand for a specific brand of soft drink is likely to be more sensitive to price increases compared to the other items listed. This is because soft drinks are typically non-essential items with many substitutes available. Consumers are more likely to switch to a different brand or choose another beverage altogether when prices increase. In contrast, items like prescription drugs, hospital care, and electricity are essential goods or services with fewer substitutes, making demand less sensitive to price changes. College tuition for last-semester seniors may also be less sensitive to price increases because students may have fewer options to switch schools or defer graduation.

For Which of the Following Is Demand Likely to Be